Sell Lehman Brothers!

Oh, gee, Barney Frank as well?

Reform Fannie Mae at the expense of po'folks? Not if Barney Frank, champion of the poor, scourge of George W. Bush, had his way. According to Wikipedia

In 2003, the Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." [5] This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. Representative Barney Frank (D-MA) claimed of the thrifts "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Representative Mel Watt (D-NC) added "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing."[6]

[emphasis added]

Uh oh, Bush got to Dodd, too!

NYT, October, 1999 - Agreement Reached on Overhaul of U.S. Financial System

The breakthrough in today's legislation came in a backroom meeting at the Capitol soon after midnight, when a group of moderate Senate Democrats -- led by Christopher Dodd of Connecticut and Charles E. Schumer of New York -- forced a compromise between Mr. Gramm and the White House over the legislation's effect on the Community Reinvestment Act, a 1977 anti-discrimination law intended to encourage lending to minorities and others historically denied access to credit.

Mr. Dodd, whose state is home to the nation's largest insurance companies, and Mr. Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act. Both men said in interviews today that they moved to strike a compromise after it became apparent that the legislation might be killed, as it was last year by Mr. Gramm, over the debate about the Community Reinvestment Act.

...Mr. Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law. He also wanted a provision that would expose what he has described as the ''extortion'' committed by community groups against banks by requiring the groups to disclose any special financial deals the groups extract from the banks.

But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.

The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements.

The mortgage mess
Okay, this whole mortgage meltdown is obviously the deliberate work of that Ol' Debbil, George Bush and his puppet master, Dick Chaney, but this
article from the NYT in September, 1999 suggests that those two evil-doers were at work during the Clinton administration, pressuring Fannie Mae to expand "minority" home loans to 50% of Fannie Mae's portfolio. "Minority home loans" meant no income verification, no job necessary and drive-by appraisals. Bush, of course, knew that this was a guarantee of disaster but somehow he persuaded Monica Lewinsky to put a bug in Bill's ear and the rest, tragically, is history.
From the NYT's article:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

...Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

Why shouldn't everyone pay income taxes?
From Professor Glenn Reynolds, of Instapundit

On a related note, I think we should rethink this business of having lots of Americans who don't pay income tax. As the Tax Foundation comments: "It is time for a serious public discussion of whether it is desirable to have so many Americans disconnected from the cost of government and what the consequences are of using the tax system as a vehicle for social policy."

Personally, I'd like to see everyone pay at least some income tax, and I'd like to see the amount of tax paid, by everyone, go up or down every year in tandem with federal spending. That would encourage fiscal discipline directly. It would also make it harder for politicians to promise everybody a free lunch, but hey -- why shouldn't they sacrifice something, too?

19 Farley Street
I like this house, a completely renovated 1900 farmhouse off lower Lake Avenue and within easy walking distance of downtown. $1.585 didn't move it but it's now down to $1.225, which doesn't seem crazy. I know the builder (no, he's not my client) and he does excellent work, so no cheap shortcuts here. I don't like the phrase "condo-alternative"; you're either in the market for a condo or you're not, but this is a reasonably-sized house for a reasonable price, in my opinion.

Orchard Place Condos
This was a fairly hot neighborhood a few years ago - despite the noise from I-95, it's within walking distance from the train and Bruce Park and condos were selling briskly. 71 Orchard Place, however, has been listed since May, 2007 and is still for sale, suggesting that this area's moment has paused, at least for now. Original price was $1.995 million, today it dropped to $1.595. Perhaps that will do it.

620 North Street, a new mansion, didn't sell at $6.390 million from April, 2008 until now. Today it has a new broker and a new price, $6.4 million. I wouldn't think this is the best time to raise a price, even if by only $10,000, but heck, what's to lose?

Harvard Graduates 1890
The Best and the Brightest?
The Wall Street Journal ran a scary story this Saturday on how close we came to a complete financial collapse last week. Of course, we may still see everything implode but, for now, the Paulson solution seems to have calmed the waters. I suppose we have no choice but to bail these people out, if you believe the WSJ article, and I do, but what sticks in my craw, and my wallet, is having to pay my money to save these jerks' hides. When they were prancing around town in their Bentleys crowing about how smart they were and how deserving of their financial windfall because they were so, so much smarter than us little people, Wall Street's wizards never offered to share their good fortune with the rest of us - at least, I never got a check. Now it turns out that they're complete morons, Harvard MBA degrees and all, and had no idea what they were so blithely buying and selling. Perhaps most galling, their leaders, guys like Dickie Fuld,and Merrill's John Thane, now admit that they were clueless about what the people under them were doing. But by God, they were chairmen of very important financial firms and that was worth a few hundred million, wasn't it?

Because of a loose (and now severed, thank goodness) family connection, I once followed the career of a particularly obnoxious Greenwich resident as he went from failure to failure, ruining one company after another and pocketing $10 million, $25 million, and so on in "please go away" money from each corporation he screwed up. With nothing to boast about boast he did, maintaining a mansion in town, flying all his favorites to Aspen for a millennium dinner that cost $1,000 a plate and in general, exuding an air of superiority that might have been intimidating if one didn't know what an incompetent buffoon he was. He's retired now, I believe - I can only hope he's soon joined by his younger peers.

Woe is us
The New York Times reports that 97% of all LIRR employees receive a 100% disability pension, courtesy of the federal government and an employer who couldn't care less about spending taxpayers' money. I don't like the idea of my money going to thieves, naturally, but what's more frightening is thinking about all the other scams just like this one going on around our country. This hoax, now exposed, might be addressed. Who's going to stop the rest of them?

Kaiser Wilhelm II
In memory of my uncle, Dr. Gerard Fountain
At a family dinner last night we got to reminiscing about our Uncle Gary who died in an accident last month at the age of 91. In addition to being a noted psychiatrist, Dean of Sarah Lawrence, professor at Dartmouth Medical School and an all-round terrific person, Gary was fond of telling what he called, "the only World War I joke you'll ever hear". We thought it a shame that such a recent joke (Gary first heard it on a Scarsdale playground in 1920 or so) should expire with our uncle so here it is again, ready for a new generation:
"Why did the Kaiser change his socks?
Because he could smell defeat."
When you stop laughing you can tell it to your grandchildren - after you explain who the Kaiser was.

Why Blog when readers can write this themselves?
Buried in the comments is this thoughtful essay from "Retired IB'r. I don't share his dark pessimism, but it's certainly a more accurate view of what's happening than you'll find in the latest NAR press release.

To look to recent times (last twenty or thirty years) as any indication as to how real estate will perform in the future is totally folly.

The author of the article you sited for example talks about how the Vancouver market did in the early '90's and extrapolates about today's recoveries.

The run-up’s in values in the last five to ten years dwarves any other period in our lifetime of experience by many orders of magnitude. Just look at the numbers.

This correction is not like anything anyone alive today has ever experienced. And all you have to do is look to the extraordinary moves by the Treasury and the Federal Reserve of last week to put the current situation in perspective.

Do not forget, our "leaders" told us six months or so ago that this was contained to subprime and it was a $50 billion problem. Now it is a trillion dollar problem and climbing six months later. I will not debate whether our "leaders" were stupid or duplicitous, but one or the other fits IMHO. Still, the rapid expansion of the problem demonstrates the mindboggling mess we find ourselves in. Add to this, the fact that Europe and the rest of the world has yet to see the problems in their banking systems as we are currently experiencing (and they will) tells me that this is a worldwide problem that has not nearly run its course.

The tremendous, unrelenting expansion of credit encouraged by the Greenspan Fed linked with a complete and utter failure of regulators and the total breakdown of underwriting standards by financial institutions is what created the worldwide credit bubble that we are witnessing exploding real-time today. To think this mess, which has real estate at its epicenter, will adjust in a mild manner and rebound quickly begs credulity.

Finally, the extraordinary events of the Treasury’s evolving bailout program appear (the details are still hidden in the mist) to not be designed to stop the fall of real estate prices, but instead an attempt to fix the broken intermediation of credit, which has come to a halt, through non-transparency of asset values. To not understand this, is to not understand the current financial meltdown. Whether Paulson, Bernanke et al succeed is still a big open question.

One day, we will find our way out of this wilderness, but it will take time, and the massive destruction of wealth (through the writing down of bad debts). The real estate markets will also have to correct to sustainable levels (without “easy credit” to support them), and only then will real estate appreciate again.

Retired IB’er

The sun's still shining for at least one person in Canada
The author is probably a real estate agent but makes some good points for those people who, like me, don't believe the sky has fallen permanently. Try it, if you wish - article is here.

Where do you live now that you've been fired by Lehman?
The answer, courtesy of reader "Jess", is Dick Fuld's place on North Street. Don't worry, if you and a few dozen other ex-Lehman folks start crowding him out, he can always move into his other homes.

Fuld's house

NOT Mr. and Mrs. Dickie Fuld, but a fun photo

Rentals
A reader asks,

How are 'The Rentals' over $5,000.00 per month - moving in the Old Greenwich - Riverside Area - is the 'Rental Market' slow too??
Is it a plus to rent the house along with all the furniture - yes - fully furnished?

I don't know much about the rental market but I hear that it has slowed and that prices have been falling for several years now - the latter may change if buyers want to wait and see what happens to the single family market.
In the past six months, 64 single family homes in Old Greenwich and Riverside rented for $5,000 or more (or at least asked $5,000 or more - some actually rented for less than that) and there are currently 29 houses actively for rent. I would think, but do not know, that the market will slow down now that September 1 has passed.
Furnished or unfurnished? Definitely unfurnished. Most houses are rented that way and most tenants already have their own furniture. A temporary tenant, one waiting for his own house to be finished, say, may have his furniture in storage and might welcome the opportunity to leave it there but, as a rule, I think unfurnished homes rent faster and more easily.

Blogger update
Cleared out all the temporary cookies and stuff from memory and Blogger now recognizes what day of the week it is. I may try this on my own head and hope for similar results.

Your house as an investment
One commentator on this blog points out that the house my grandmother bought for $15,000 in 1957 and which is now worth, I hope, $2.0 million, has returned "only" a 10% annualized return. With all respect, he misses the point - I've never argued that real estate, even Greenwich real estate, is the best place to stash your investment money, but assuming you need a place to live in and raise a family, this is a great town to achieve that goal.
My grandmother entertained 5 grandchildren in that house over the years, had a happy life there herself, got to watch and paint the goings on in the creek, hosted Katharine Hepburn for tea on the front porch (Hepburn, as a very young girl, considered my grandmother the movie star a role model - it was nice the two finally caught up with each other)and, all in all, got full value for her $15,000. When Nancy and I moved in we spent a small (huge to us) sum gutting and expanding the place and raised our own three children there. They could walk to school, ride bikes to their friends' houses, fight, swim and boat and in general, have a pretty nice childhood.
So if we end up selling the house for less than an index fund might have earned, so what? Vanguard certificates could never have produced any of the joys, sorrows and pleasures we've experienced in our house. and we didn't pay rent. I'd do the same thing again.

Fowl Play
Okay this is rude...
The victim attacked by the Tod's Point turkey Is still concerned. Looking at her picture, I wonder whether the turkey attacked because of feelings of inadequacy in the er, chest deprtment.

Slappy the Happy Clown
Three contracts this past week instead of 10 per day
Some of my peers will insist that I report this as a strong sign of a recovering market but the best I can say is that, for a fat girl, she sure doesn't sweat much.

Blogger.com still causing problems
Still having difficulties posting, the program doesn't recognize that it's now Saturday morning, won't save drafts, etc. It's nice of Google to provide this service but they're absolutely silent when they run into difficulties, don't suggest when they might correct anything and provide no way to contact them. I am in the process of switching to WordPress but until then, please bear with me.

Joe Biden on "altruism"
The other Vice Presidential candidate has strong thoughts on what it means to be a nice guy and give to the poor. One of my own readers considers paying more taxes to be "the neighborly thing to do" (query why he doesn't just go ahead and do it - would he like the IRS's address?). this fellow in Denver takes another view

When exactly did taxation transform into a form of charity? Biden, it seems, has a difficult time differentiating between coercion and generosity. The distinction is simple: When one fails at altruism, he is a louse; when one fails to pay taxes, he ends up in the slammer.

But anyone can "jump in" at any time. Biden and his wife, who would be considered wealthy under an Obama/Biden tax plan, for instance, gave an average of $369 a year to charity during the past decade. So you can see that by "help," Biden means assistance with your money.

Have you ever wondered when exactly taxation became a tool for mass redistribution of wealth?

"We want to take money and put it back in the pocket of middle-class people," Biden explained in an interview on "Good Morning America." The wealthy, last I heard, did not "take" or steal from the defenseless middle class; they, most often, earned their money. There is nothing to give back.

Moreover, the very premise of Biden's argument is a rickety mess. The rich already shell out their share. According to the Internal Revenue Service, the top 10 percent of households pay roughly 70 percent of all federal income taxes. The top 5 percent pay over 60 percent of all taxes. The top 1 percent? They pay nearly 40 percent of all income taxes. Sounds like an unfair share to me.

Myself, I like the moose hunter more every day.

(Friday September 19, 2008)
Time flies!
Another year has gone by and it's once again Talk like a Pirate Day!
AARRRGGGH!

Date and Time stamp not working
I blame it on Blogger.com, not me, because other bloggers are complaining. No word from the operator as to what's happening and why but I presume they'll fix it.

Greenwich Time reports that a wild turkey is threatening beachgoers. So far, the police have decided to let the poor bird stay where she is but spokesman, police Lt. Kraig Gray warns, "it's being more aggressive than it normally should and sooner or later something will end up happening."
Er, like Thanksgiving?

Let's hope it doesn't come to this
The New York Times reports on The Pain of Selling Short

AGI and Lehman, explained. But the authors seem to have no better idea what will happen going forward than I do which is to say, eh?

World does not end (today)
Stocks Soar

Buying during the Depression?
A reader asked if anyone had the institutional memory of what happened to real estate in town during the Great Depression (and no, I don't think we're going there). I'll call some of my friends who do have that kind of memory - Bernie Yudain would be a great source, I suspect - but I do know that a friend of mine's great uncle was offered almost all of the land that now comprises Indian Head Road and its offshoots for $30,000. He saw the value but alas, was no better off than the seller so he turned it down. My friend is still working for a living but had that land been bought ...

I also have noticed that some of our most magnificent estates were built in the 30's, and why not? Land was cheap and labor was cheaper. If you had money during the Depression, there wasn't a better time to spend it.

There are already great buys out there today. I've mentioned my brother Gideon's listing on Indian Head Road - one acre of beautiful lawns, pool, secluded, with a custom built house, all for $3.6 million. Other agents and I were marvelling today over how much the market has changed because, 2 years ago, $3.6 million in Riverside bought you very little. Heck, I sold two houses just last year at $3.8 each and, while the houses were nice enough, each was on a half acre on a busy road. And no pool. If I had money and wasn't worried about being forced to move in the next year or two, I'd be out looking for bargains. This period will eventually look like a buying opportunity if you buy the right house at the right price.

And so, look: I found some happy news after all.

Well darn, this isn't going to help fill out the Happy News department. NYC coop prices plummeting.

Manhattan's finest co-op apartments may have already lost a fourth of their value as a result of the financial crisis, and the worst is yet to come, says leading New York estate broker Kathy Sloane, of Brown Harris Stevens.

An owner of a five-million dollar Park Avenue apartment, only an average residence by investment banker standards, "may be lucky to achieve $3.5 million" a month from now, said Sloane, whose clients have included celebrities, the super-rich and prominent families including the Clintons.
"If someone saw a bid between $3.8 million and $4.2 million from a qualified buyer, take that bid," said Sloane in an interview to be broadcast on 20/20 Friday night.

Some of these owners sold in New York and came out here to buy houses. Can anyone say, "down sizer"?

Sucking up to Royalty
Okay, this is shooting fish in the barrel but ...
Grab onto your hats, my old paper,The Greenwich Post, has launched its new gossip column:

Scene ... Greenwich residents and talk show hosts Regis and Joy Philbin were seen dining at Valbella in Riverside last Saturday night. At a separate table was WWE chairman and Greenwich resident Vince McMahon and his wife, Linda. Also seen dining among the celebs was Greenwich Hospital president and CEO Frank Corvino. On a separate occasion, His Royal Highness Prince Moulay Rachid of Morocco and a bevy of young beauties were dining downstairs in the wine cellar while his three bodyguards waited for him upstairs.

Scene... Riverside residents and TV personalities Kathie Lee and Frank Gifford were seen having dinner at Figaro on Greenwich Avenue last week.

Aside from the fact that, if you want to see, meet and actually speak with Frank and Kathie Lee you can come to my church on any Sunday and do just that, instead of gazing longingly from afar as Frank masticates a lamb chop,is it really worth chopping down a tree to distribute this hard-hitting, must-have news? Does it enrich one's life to know that someone heard from someone else that Eric Clapton was on the same island (maybe even at the same time!) as that third party? What sort of self-respecting newspaper editor allows himself to be involved in this schlock?

It surely hasn't escaped the notice of the Greenwich Post that our town is suffering a bit of a rough spot in the ol' real estate market yet, to save printing costs, they've cut their last remaining real estate columnist to a bi-weekly schedule to make room for the doings of His Royal Highness Prince Moulay Rachid of Morocco. The columnist is no loss, unless you wanted to read the latest press release from the National Association of Realtors ("Everything is beeeoootiful, everything is fine ..." ) but still, how does this man look himself in the mirror?

I was the only paid columnist at the weekly advertiser (and they solved that problem) so the absence of real estate news can be attributed solely to the lack of funds to actually print a paper. Of course, if you remove all the content from your paper, there might - just might - be a connection with a declining readership, no matter how many copies you stuff, free, into mailboxes.

I'm not (particularly) bitter that I'm no longer associated with this drowning enterprise -I'm having fun being on line and I'm proud to be free. My former editor might try it himself.

Do as I say, not as I do

This fine gentleman from our Parking Authority is parked in the exact location that netted me a $25 parking ticket. I have his license plate (197 GW) - should I drop him a note and ask that he contribute to the cause?

How not to cut your price
65 Summit Road in Riverside just cut its price from $1.375 to $1.350 million. I strongly encourage sellers to check their asking price and slash that price if no one's offering to buy, but a tiny price cut will accomplish nothing. If your house isn't selling, a $25,000 difference of opinion as to value isn't the cause.

Housing Lots for sale
68 Halsey Drive in the Havemeyer section of Old Greenwich was offering a four-lot, approved subdivision for $3.450 million, or $862.5 per lot. It's been reduced to $2.7 million - $675 per lot but I'm not sure that will do it. Assuming $1.0 million to build and carry each house here, you'd have to sell them for $1.675 each, or more. Two of the lots are tiny: 7,000 and 8,000 sq.ft., respectively, so if they sold for less, you'd have to get more on the other two. I like Havemeyer, but new houses there were struggling at the $1.75 range at the height of the market and to risk that kind of money today means you've got a rosier vision of the near-future than I.

Fuld's Acres
Wanna buy a house?
I figured that Dick Fuld was too busy to invite me in for a cup of coffee this morning and escort me on a photo tour of his cottage at 717 North Street, but here's the entrance. Very nice, and I suspect that it nicely balances his $26 million coop in the City.

You know, my father pulled a few of his Wall Street connections years ago and got me an interview with his best friend, Bill Golden, who mentored me when I'd just graduated college and was considering: Wall Street or law school? I concluded that I was strong on communicative skills and weak on math so I chose law school (reading his obituary linked here, I just discovered that Mr. Golden hated math too - darn!). Now I learn that all these "math wizards" were just making up the numbers as they went along - shucks, had I known that, I could be living where Dick does now, instead of being relegated across the street, snapping pictures with my iPhone. Too late smart.

89 Lower Cross

House for sale, cheap
This almost-completed mansion at 89 Lower Cross Road can be yours for just $2.595 million. It's within a stone's throw of prestigious Conyer's Farm (but just try throwing a stone across the barrier and you'll be arrested faster than you can say "chukkar") has it's own pond just beyond a large swath of wetlands and the building is mere inches from the road, thus sparing you expensive snow plowing bills in the winter. I'd rush - as they say, "this one won't last!"

Slappy the Clown's Happy Dance

Happy Talk
I am under increasing pressure from my real estate peers to stop being gloomy and start reporting happy news. Ever eager to please, I looked up recent listings going to contract and compared them to last year. From June 15 through September 17 of 2007 147 houses went to contract, compared to 101 this year. That's a drop of 31%, more or less. In the shorter period of August 1 '07 through September 17 2007, we saw 64 contracts vs 33 this year.
So what's the happy news? I dunno - I suppose we could have sold nothing, and wouldn't that be a bummer.

This is offensive
Received via email this referral fee schedule from a local builder:


Offensive because I think a real estate agent's customer should be able to trust that she's getting good advice, not a disguised sales pitch. Or at least, that's my opinion.

Sleeping in the Playground
The town is planning to
redo the Bruce Park playground.
According to its sponsors,
a) Every child can reach the highest play level
b) Play structures are configured to support all children’s development
c) Pathways and surfacing are universally accessible
d) Cozy gathering and away spaces provide a rest from the action
e) Equipment such as swings with back support
f) Sensory-rich and ground level play activities.

It all sounds boring enough to drive even the most adventurous child back to his videogames.

Ugly
Stocks not doing well today
Uglier still:

With no hope for the return of the mortgage securitization and overall liquidity continuing to dry up, we believe that with fewer mortgages available,fewer people will qualify for mortgages, and homeownership will head materially lower. All this creates a recipe for meaningfully lower US house prices.

With apologies to the Rev. Jeremiah Wright, the chickens have come home to roost

Lehman's bad real estate ventures

One real estate investment broker described Lehman as “the real estate A.T.M.”
“They definitely were the mavericks out there,” said the broker, who did not want to be identified to protect his business relationships. “If you needed money, you could get it.”

Does anyone remember the Lehman/Antares ventures? Here's what Mr. Beninati, "Mr. Antares" says of his lenders on his own web page:

"In every deal we do, lenders decide if that project is for them," Beninati said. "But over the years, the opposite problem has arisen. Several banks might agree to finance our projects, and we regularly have to call some of our oldest and dearest friends in the industry tell them that Antares cannot give them business on a particular deal."

Gee, I don't know, it seems to me that Antares was only too happy to "give them the business".

From The Grim Reaper Gazette

Housing starts at 17 1/2 year low
I've had a couple of conversations with builder friends and clients and I can confirm that this same sense of caution pervades Greenwich, too. Of course, fools rush in ... and all that, so we may still see some activity.

Where's the legal authority for the Government to buy AIG?
Nowhere, but apparently not enough people care.
David Zaring:

But, in the Fed's legal defense, maybe, just maybe, the settled expectations are different here, based on the government's takeovers of Fannie and Freddie, and the pleading by AIG for government involvement. Does the very fact that the insurer hoped for Fed action suggest that the Fed could act?
Hmmm. The other defense would be that emergencies are emergencies, and when that happens the rules go out the window, and hopefully regular elections mean that the officials the people trust are dealing with the emergency. Abraham Lincoln adopted that reasoning, and he won the Civil War. I suspect we're at the "anything goes in an emergency" stage of things. But maybe reasonable minds could disagree.

Megan McArdle writes,

A lawyer friend IMs "I would be fascinated to know on what authority the Fed is claiming the right to do this." It's probable that they don't actually have the legal right to do anything like this. Their authority is this: who's going to stop them? No one wants to take on responsibility for this mess themselves.

I'm all for living in interesting times, but these days, things are getting curiouser and curiouser.

Hunter Thompson Lives
Reading the rantings of Greenwich Round Up is a bit like spending time with your crazie Uncle Eddie, fresh from another unsuccessful round of electroshock therapy at Silver Hill. Always entertaining, equally confusing and crammed with HUGE HEADLINES, tuns of mispelings and nasty things to say about almost everybody. But always fun, so long as you're not on the receiving end.
And, to give Crazy Eddie his due, they guy is way ahead of the local press on issues like the Byram School fiasco, the bozos (okay, I used a picture of bonobos to depict them, but close enough) on our School Board, and the sad, escalating decline of our daily paper, Greenwich Time.
I disagree with him most of the time - I happen to support the new Stanwich School, for instance, even though I have no kids at that school and if I, as a disinterested person, can applaud their efforts it seems reasonable to assume that our P&Z's decision in favor of the project could be because reasonable people think it's a good idea, rather than because of bribery and corruption.
But so what? It's a fun read.

NOT subject property
The builders are leaving tra la, tra la
89 Lower Cross Road was offered as a to-be-built mansion back in 2006 for $6.7 million. Construction started but no one bought and now you can buy it, complete with "foundation and partial framing" completed, for just $2.595. How valuable are such improvements after they've sat out in the weather for a few years? Another way of asking that is, what's a building lot worth on Lower Cross, minus the expense of scraping off and disposing of the wreckage?

Gabriel Nathan Schwartz
Ah, those fun loving delegates!
Some readers suspect me of being a Republican sympathizer. I'm not. But I do like following the foibles of politicians of both parties, such as this yokel who got robbed $50,000 at the Republican convention by a lady he let into his hotel room. What a 30-something male lawyer is doing carrying that much jewelry is a mystery, but $4,000 of the loss was a pair of earrings and he is a Republican, so perhaps that's the explanation. But take a look at the guy's picture. Could anyone with an ounce of self-honesty think this face would cause a beautiful woman to invite herself up to his room? Maybe she was also a masseuse.

One of my favorite and wisest writers, James Lileks
Has this to say about boom times:

Having lived through a few such panics – real estate in the late 80s, the Savings and Loan crisis, junk bonds, the dot-com nonsense – I can conclude only one thing: no one pays attention to their gut. Whenever real estate spikes, my gut always says it’s a temporary thing, because two-bedroom houses with a cement yard and a bathroom that consists of a bucket can't possibly be worth $800K just because it’s in California. Ditto the dot-com: start-ups like tentonsoftofu.com were getting millions of dollars with the usual vague projections: in the future everyone will be online, and since tofu will be more popular than ever, people will want to buy 20,000 pounds at a time if we offer the convenience of online ordering combined with free shipping. Most people thought it was nonsense, but the times were good, so enjoy.

Pricing tip
I'm aware of a certain house whose owners paid too much for, back in the day, then compounded their error by over-improving what they'd bought. It's a lovely house, but it's priced way above what they can ever hope to get for it. When their agent suggested a price reduction, they proudly showed off a new kitchen they'd added and asked, "how can you ask us to drop our price now that we've redone the kitchen?" Well, if they'd asked their agent, she would have advised against throwing more money into the house. At a certain point of over-pricing, adding features will not address the real issue, which is price. These folks have just built a beautiful kitchen for someone else to enjoy but it will be at the sellers' expense. My advice? Get advice, before you spend money on a house you're trying to sell.

It must be the Boston Globe's day
here's a good blog on truth in real estate advertising. Turns out, buyers aren't stupid. Who knew?
The writer wonders what the phrase "must see" means. Had she asked, I'd have told her: a complete mess from the outside, so bad that no self-respecting buyer will get out of her car to examine it. The phrase implies a promise that there is something to see inside but in my experience, that's a lie.
One of my favorite phrases is, "now priced to sell". What the hell was it priced at before?
Or, "renovated", with no further details. Believe me, if we agents can find anything positive to say about a house, we'll mention it, so if you see this phrase but no specifics like new kitchen, new master bath, etc., you can assume it means that the fireplace ashes have been removed and the dust bunnies swept from under the bed, period.
"Convenient to transportation" of course, means it's cheek-by-jowl with the highway, the railroad, or both.
"This one won't last" almost always appears on dogs (and usually in conjunction with "must see". It's always bittersweet to see this description still lingering on year-old listings.
Need any other interpretations? Care to add some of your own? Pile on.

More pricing follies
29 Byfield, mentioned here before, was listed April 15, 2008 for $9.495. It's been dropping like a rock ever since and today was reduced again, to $5.698.
39 Boulder Brook, also listed on April 15 by the same broker, came on at $8.595 and dropped yesterday, again, to $4.998. Same broker, same listing date - same builder? Someone's losing sleep, if so.
12 Doubling Road, coincidentally, was also listed by the same broker,back in September '04 for $14.5 million and eventually sold for $7.575. A building lot was split off and sold for $4.130 in '06 (nice price for the seller, I think) and now the original 1913 mansion, completely restored but shorn of several acres of its magnificent lawns, is back on for $13.5 million. Convenient location and nice house so maybe this time's the charm.
And then we have 228 Stanwich Road. Its original owner tried to get $2.125 for it at the height of the market in 2007 but finally sold it for $1.7. The new owners returned it to the market, untouched, a year later, and asked $1.895. Today they lopped off $46,000. Call me crazy, but I think they'd be better off shooting closer to the price they paid for it. Regardless, I don't think a 2% price cut is going to be much help.

35 Club Road
This new construction in Riverside sold yesterday for $8.675. The owner wasn't engaged in a spec project, as I understand it, but someone saw the finished product and made him an offer he couldn't (or didn't) refuse. A new record for non-waterfront property on this road, I believe. So that's nice.

Uh oh
Five hours ago: Goldman Sachs expected to reassure investors amid market turmoil
30 Minutes ago:Goldman Sachs reports huge profit drop

Are you reassured?

Good Lord!
A columnist for the Boston Globe who understands Obama's tax plan. Next up, the New York Times? Nah.

Okay, here's some good news for homeowners
If this market has messed up your dream of getting rid of where you live and moving into something better there is a silver lining: great contractors are available for small projects. My Pal Nancy recently hired Rick Hvolbeck and his partner, Al (whose last name I should know, but forget) to replace a rotten column (not my newspaper column but one holding up the porch), failed sills and window trim. They did a terrific job for an incredibly reasonable price. No surprise here: Rick's a 3rd generation Greenwich home builder and Al clearly knows his stuff as well, but, according to Nancy, they came when they said they would, were neat, did a beautiful job and had no hidden expenses when they were finished.
Rick can be reached at (203) 249-2297 or RCH1043@aol.com. The two of them are so good that I'll permanently post their contact info on the side of this blog. If you've been considering new kitchen cabinets, a new garage (these guys can build you a new house, of course) or, like Nancy,just fixing those depressing, rotted bits of your house, now is the time to do it and these two are the men to call. No, I don't get a discount for my own work, I just know how difficult it has been to find competent people willing to attend to smallish jobs. Now's your chance.

Boulder Brook now reduced to $4 998. I'll check
my earlier post on this tomorrow but I.believe it started in April at $8 5 Stupid

And who's going to pay those taxes?
Maybe not real estate agents. No contracts today, at all.

Anticipating a winning election
Democrats planning
gas stamps for po' folks.
I mention this today in honor of it being quarterly tax payment time. Hang onto your wallets, we're in for a ride.

Overpricing houses isn't an unheard-of-until-now phenomenon
This perfectly nice house was first listed back in June '02 for $7.995 million. It didn't sell and it's appeared and disappeared from the market since then. Today it's back, asking $6.995. That may or may not be the right price now, but a million less after six years suggests a misplaced optimism back then.

Lehman price and volume charts
Question for you traders
Lehman opened at $0.26 today, rose as high as 0.34, dropped to 0.15 and is now (well, 15 min. delay) trading at 0.18. The company is bankrupt and almost by definition, the shareholders are wiped out and the shares should be worthless. I can understand someone selling this stuff but who's buying it? This phenomenon seems to occur in other bankruptcy situations, too, and I've never understood it. Shorts who have to buy what they sold? Befuddled old grannies? An explanation would be welcome.

This is the kind of stupidity that hurts the cause
From a Litchfield paper's article on a "green" home

The insulation isn't the pleasant bubble gum or canary hues that distract a person from the carcinogenic dangers of typically used Fiberglas rolls. [emphasis added]Though Fiberglas has a high R value, which is the measure of thermal resistance, it is also very permeable and allows hot and cold air to pass through easily. The zero energy house uses recycled spray-on cellulose, made mostly from old newspaper, that is healthier, fireproof, insect-proof, has a slightly higher R value and at 7.5 inches thick, is nearly impermeable.

Trying to scare people with phony cancer claims is just stupid because, when they discover you know nothing about that, they might begin to wonder if you know anything about the subject at all. Reporters should stick to facts. Opinion bloggers, on the other hand, are free to write whatever damn nonsense we like.

The (stock)market seems to be bearing up but ...
If I recall, we've seen the bottom fall out late in the afternoon just before the closing bell. There's still time for fireworks. Discouraging note: not a single contract has been reported by the MLS as of this posting. They may be too busy over there to post contracts (perhaps they're on the phone with their stock broker) but you usually see some signs of life after the weekend. Stay tuned.

What happens to a $3 million house when a $5 million drops to $3.5?
Nothing good, I suspect. I asked this same question a few years ago in my column when I noticed the large number of huge spec mansions going up and I questioned whether they'd all sell. I got no answer because at the time, they did keep selling and at ever-increasing prices. Now they aren't, and their prices are falling faster than Lehman Brothers' shares.
If what is really a $5 million house is slashed to that price after stupidly being priced at $8.5 no harm is done, I'd think, because now it's just competing with its peers. But in this market, what can be said objectively to be worth an absolute amount? What might have been considered a well priced house at $5 million a year ago may not sell today, regardless of what we agents think. If its builder, faced with foreclosure and total loss versus minimizing his losses and getting out while he still can - picture the dilemma of Merrill Lynch's chief yesterday afternoon - cuts that price to $3.5 the "real" $3.0 million house is going to look like a comparative dog. And, assuming someone can afford $3.5, won't he buy that instead of the lesser house? And won't the lesser house have to be marked down to reflect that?

All this is speculation, of course - most of the price reductions I'm seeing simply serve to bring the price closer to reality but I suspect it won't be long before genuine price cuts drop houses below what we would have considered their fair market value last year. If so, we'll have a merry time of price restructuring, from the top down. Good for the market and for buyers, eventually, but dispiriting for sellers who'd counted on gaining a fancy price for their home.

More on Starbucks
O.K., that's Ahab drowning, not his pal Starbuck but you get the picture, so to speak. I went onto Starbuck's website this morning to try to lodge a complaint about their discontinuing the sale of Colombian coffee and, so far as I could tell, there's no one out in Seattle who cares to receive any such message. Want information of buying CDs? Locating a frappe java?
Click away. Got a complaint about actual coffee? Screw you. Well, in this blessed system of sort-of-free markets, I have a response to that.

Oil Prices Fall below $100.
How can this possibly happen, when oil speculators are capable of setting the price wherever they want?

Won't somebody please invent an alternative to oil so we can wash our hands of the Middle East?
Orthodox Vigilante Squads Terrorize Citizens

Business websites overloaded
I can't log onto Bloomberg.com or biz.yahoo.com, presumably because they're overloaded with readers. WSJ.com is working and, here's a surprise, they expect an anxious day. Too bad my father isn't still alive - he began working on the Street in 1929 and would no doubt have some perspective to lend on the "sky is falling" crowd.
On the other hand, maybe the sky is falling. Regardless, we're in for an interesting day, or time.

Bottom headline of the day
Obama Blames Wall Street Crisis on Republicans. George Bush and Dick Chaney were also spotted placing bombs around the Dot.com boom back in 2000.
Okay, there are two today:
Lindsay Lohan Lashes out at Palin

Economic Illiteracy
Judging from conversations with my own kids over the years,the basic tenets of capitalism aren't being taught in our schools. Here's part of what George Will writes in today's Newsweek. I wonder whether we can persuade him to come guest lecture at the High School? He'd be useful on a day like today.

But back to Big Box doubling prices after the earthquake. The indignant student, who had first gone to Home Depot for a flashlight, says it "didn't try to rip us off." It was, however, out of flashlights. Ruth suggests that the reason Big Box had flashlights was that its prices were high. If prices were left at regular levels, the people who would have got the flashlights would have been those who got to the store first. With the higher prices, "someone who had candles at home decided to do without the flashlight and left it there for you on the shelf." Neither Home Depot nor the student who was angry at Big Box had benefited from Home Depot's price restraint.

Capitalism, Ruth reminds him, is a profit and loss system.Corfam—Du Pont's fake leather that made awful shoes in the 1960s—and the Edsel quickly vanished. But, Ruth notes, "the post office and ethanol subsidies and agricultural price supports and mediocre public schools live forever." They are insulated from market forces; they are created, in defiance of those forces, by government, which can disregard prices, which means disregarding the rational allocation of resources. To disrupt markets is to tamper with the unseen source of the harmony that is all around us.

Sally O'Brien died last Friday.
I didn't want to intrude on her family's decision when to announce her death but today's Greenwich Time carries her obituary. Sally was one of the great ladies of real estate and a terrific person of integrity. I loved her quirky listings and I thought the world of her.

Before Lehman's collapse eclipses Fannie Mae
The Washington Post today explains how Fannie and Freddie bought Congress. Plenty of blame to toss around, but a good place to start is Dem. Barney Frank

Why do people screw good things up?
Starbucks has stopped selling Columbian beans. The kids behind the counter confirm that it was a huge seller (in fact, I believe Starbucks was the largest purchaser of Columbian coffee in the world, but I could be wrong on that). I don't like what the store does to coffee once they try to brew it themselves but their beans, freshly ground and prepared in a French press, made a very good cup of coffee. And no, I'm not going to buy one of their even pricier blends, I'll just have to find a new source for my morning brew.

Similarly, the idiots who ran the Sitemeter spot which runs on this blog and offered readership statistics to anyone curious to see them have now improved their product to require sign-in, extra clicking and God knows what else. I've always been lazy so "leave well enough alone" has been my life's mantra. Others obviously have more energy.

Does "green" equal $green?
Not as far as I can tell. A number of builders have gone to extraordinary lengths the past few years to incorporate sensible energy-saving features like super insulation, really sophisticated heating and cooling systems, "E-glass" windows and so forth. I think these houses are great so it disappoints me that the home buyers seem unwilling to pay anything extra for such features, even if they'll save a lot of money in the long run. I know, I know, "in the long run we'll all be dead" but this kind of construction makes a house immediately more comfortable to live in and payback should come in just a few years. But I've been informally keeping track of the selling price for these houses and it seems to me that they sell for just about what their less sophisticated brethren sell for. Location, number of bedrooms and all that still rule and buyers just aren't interested in saving on heating and cooling costs. Maybe $4 a gallon fuel oil will educate them. In the meantime, if you are a buyer, keep your eye out for these homes - you can buy them for no more than a regular house so you'll be getting a nice subsidy from the builder.

Update:
Here's a thoughtful article asking whether "green" houses have to be ugly. The author is too kind to post actual photos of what she considers ugly brutes (a softness I don't share) but she's on to something. I like the looks of the green projects I've seen here in town, mostly, but ugliness is not going to help these things sell. I'll go look for examples with which to embarrass some people.

More good news!
According to some of my peers quoted in the Stamford Advocate, the federal bailout of Fannie Mae
will return sweetness and light to the housing market. I disagree, but never have I so wanted to be wrong.
Update:
Here's someone in Arizona who's being fed the same line and is similarly unimpressed.

Sign of the times?
Greenwich doesn't permit broker "for sale" signs but our Board of Realtors has just added a new category for listings: short sales, which are tedious, cumbersome proceedings that may permit a seller to sell his house for less than he owes. The new category serves as a heads up to buyers' reps that this isn't going to be an easy sale. For details on just how involved this is, see
this article from the Hartford Current.

Bargains?
I checked out
Realtec.com this morning and its site claims that there are 29 properties in Greenwich in "pre-foreclosure" mode. Now this just means that a notice of intent to foreclose has been filed on the land records, which is mostly an attempt to cut off more creditors from getting ahead of the lender. It does not necessarily mean that the property will be foreclosed and, historically, few Greenwich properties go so far. But these may be new times and some of the addresses: Perkins Road, Stanwich, Taconic, Buckfield Lane and the like could all offer some value. Depends on either the seller's willingness to get out early or the bank's desire to unload once they take title.

A ray of hope?
Maybe, but don't hold your breath. I've heard of several sellers who have accepted offers in the past few weeks but have not reported their houses as "under contract" because mortgage contingencies are taking longer to be met. So it's possible that last week's dismal performance (3 contracts all week, compared to 8-10 a day this time of year) can be explained and that we'll see the traditional surge of sales a few weeks later this year.
My personal feeling is that, while there are indeed buyers out there, they've been offering much less than the sellers are looking for and, so far, the sellers aren't bending. If the financial world collapses tomorrow, as seems possible given the seeming lack of progress resolving the Lehman mess, these sellers may regret their intransigence.

No good news here
A friend with reliable sources has given me very bad news concerning Sally O'Brien. I won't pass it along in the hope it's false but her friends might want to make inquiries.

A Home Run?
Local real estate columnists seem to think that the federal salvage of Fannie Mae is going to save our industry. I disagree. Look, people will always need housing and Greenwich will, at least until the School Board finishes destroying our educational system, continue to be an attractive place to live, so we're not going to see Fargo, North Dakota prices here in town - I hope. But the Fed's action is a huge admission that the mortgage business is in deep, deep trouble. One reader of this blog has commented (and if you're not reading the comments, you're missing much more wisdom than you'll find in these primary postings) that we have $11 trillion in mortgage liability outstanding and something like $600 BILLION (corrected by reader) backing it up. That's not encouraging. We'll all survive, and I continue to believe that buying a house now at the right price will prove a great investment a few years from now, but federal intervention in the lending market is a sign of desperate times, not a ray of sunshine; in my opinion.

By the way - it's been a while since I ticked off Franklin Bloomer, head of our Land Use Commission and chief of silliness for the Floor Area Ratio regulations. He wasn't pleased when I reported that he'd torn down his house in Riverside and replaced it with a Westy's self-storage center as reparation for denying Greenwich residents the use of their attics, and I just realized that he's still wrong, and still in office. So here's my vote for his well-deserved retirement. Perhaps he can start a hedge fund.

Hedge fund envy
This article is on the Times' most emailed list today so I suspect that there's a fair bit of schadenfreude floating around concerning the fate of hedge funders. I suppose the most truthful, and painful aspect of all this is that "hedgers" were supposed to be able to churn out profits regardless of market conditions because they were so much smarter than the rest of us and knew how to hedge their bets. Turns out, many of them were just Bozos on the bus, just like the rest of us. Phew! I can go back to being proud of my philosophy degree.

What happens to this project?
The Antares UST project is supposed to be fully leased and ahead of schedule, according to this press release. I wonder, though, whether the events of the past few weeks and events yet to come will cause some of those tenants to disappear. Regardless, this portion of the press release seems almost quaint, now:

"One Hundred West Putnam is another major victory in an already
distinguished Antares track record for creating massive real estate value in
their projects," said Bruce Mosler, Chairman and CEO of Cushman & Wakefield.
"C&W is excited to be working with Antares to bring more global leading
companies into their groundbreaking office development at Harbor Point on the
Stamford waterfront as C&W knows we can count on Antares to provide Class A +
buildings on schedule and on budget."

19 Dingletown
I haven't seen this listing that just came on today but it's on an acre of land, has a slate roof and looks pretty nice. It's priced at $2.495 million and was purchased 10 years ago for $1.6 million. That seems like a reasonable rate of appreciation - I hope I'm right. In any event, I congratulate the seller and the listing broker (Round Hill Partners) for acknowledging that this is not the market to shoot the moon.

Of this and that
The Google map feature I was playing with does seem to be slowing up the page loading, as several readers have observed. Plus, coincidentally or not, my iPhone has started crashing on the site since I added maps, so they'll be gone. You can always go to "Googlemaps.com" and type in the address yourself.

The posting about 77 Sheephill Road did not get disappeared - it just got bumped over to last week's postings, found to the right.

And how's this for a straight-forward warning from our government regarding Hurricane Ike?

LIFE THREATENING INUNDATION LIKELY! ALL NEIGHBORHOODS…AND POSSIBLY ENTIRE COASTAL COMMUNITIES…WILL BE INUNDATED DURING HIGH TIDE. PERSONS NOT HEEDING EVACUATION ORDERS IN SINGLE FAMILY ONE OR TWO STORY HOMES WILL FACE CERTAIN DEATH.

Yesterday, after this warning, The New York Times found a 46-year-old Galveston woman perched on a milk crate and sipping brandy. "It's just gonna be a lot of wind and rain" said she. Last words?

Hmmm
No one seems very cheery about Lehman's prospects. I'm taking no particular joy in their demise because I have friends who work for them or did until today and, friendship aside, these people and their peers in the financial industry have been driving the Greenwich real estate market. It's all very well for commentators to celebrate their demise but for those of us who wanted to sell houses to them, it's a bummer.

Along that line, did you know that only three single family homes went to contract this week? One, 7 Ginko Lane, priced at $1.150 million, went via bidding war. of the other two one was under a million and the other not much more.

Perhaps reflecting this, Mark Mariani has reduced his 11,000 sq. ft. spec house on Sabine Lane by 25% and it can now be yours for just $8.950 million. If your Shearson stock lost $2.8 million this week you can still buy this house and be right where you were.

Can we now, at last, close this case?
Rosenberg really was spy - his co-conspirator finally admits it.

Lehman's woes
I doubt that this firm's difficulties all stem from their commercial lending arm but whoever worked in that area certainly didn't help the parent stay strong. Case in point is Lehman's loan to Antares to buy those aging apartments in Byram. The purchase price worked out to something like $800,000 per unit which any real estate agent, if asked, would have said was crazy. So far as I know, they never asked.

My brother Gideon tells an illustrative story of receiving a late-night phone call from an investment bank client almost 20 years ago. The bank was considering buying a failed condo project in town and wanted Gideon's opinion on what they might sell for in a worst-case scenario. Gideon opined, the bank passed and someone else stepped in and lost their shirt. The bank that thought to ask Gideon (and presumably a few other Realtors) is still in business and doing well. So the lesson is, if you don't know what you're doing, ask someone who does.

What part of "restructuring" don't sellers understand?
I have been seeing some reasonably priced listings recently but I'm still struck on open house days how many sellers (or their agents) haven't noticed that we're undergoing a restructuring, downward, of prices. I won't list specific addresses here (it tends to upset owners) but there are a lot of houses out there that will still be for sale in the Spring unless they drop their price substantially. A good indication that you've over-priced your house? 12 showings and no offers. If that happens, take out your meat axe.

10 Cat Rock
So-so picture but terrific house
New listing at the entrance to Cat Rock Road (I realize that there are people who love that street but I personally prefer houses on it that are close to either end). This was built a year ago and it's beautifully done. Three floors, decent yard backing up to conservation land and lots of Count Rumford fireplaces (which are large and shallow and throw heat into a room, rather than sucking it out. Designed by Count Rumford who, because he was a Tory, had to flee to England where he made a living fixing smokey fireplaces). I think Ann Simpson has priced it well at $2.995 million but these days, who knows? It would certainly have sold at that price a year ago and I think it should today but I am not the market.

$13,000 to power 19 lightbulbs?
But the symbolism is priceless.

Lehman Tumbles
This is not good for Greenwich real estate, I fear.Watch it fall in real time here

Price reduction on Indian Head
I thought this house was priced well when it came on two weeks ago at $3.895 but the market being what it is, it's already dropped $300K. For its Indian Head Road location, that's pretty good. Disclosure: it is my brother Gideon's listing, and I can't say mean things about it or our Sunday family dinners will be awkward, but I really do like the house. As an aside, know that I will always disclose any personal interest I might have in a listing I discuss, so if I make no such mention, you can be certain that none exists. 23 Byram Terrace, for instance,mentioned below, is listed by Diane Dutcher, who is with Coldwell Banker in Old Greenwich.

23 Byram Terrace
Here's a nice house
At $1.495 million, this new house built by Dave Tilly is an excellent value. I hope that the address will support this price level because, if it does, it will encourage more builders to build like this. The house is super-insulated with soy-based foam, has a computerized HVAC system that should save the owner a pile of money in heating and cooling bills and is, all in all, a very attractive project. You can check out more photos here.

The fix is in?
It's not sexy and I suspect no one really cares,especially on this dismal anniversary of 9/11, but this Wall Street Journal editorial complains that certain investors are getting a free ride on the Fannie Mae bailout, courtesy, as usual, of us taxpayers.

With the weekend bailout, however, those investors can buy another vacation home, or three. On Monday, yield spread premiums on Fannie Mae subordinated debt maturing in 2011 plunged by three full percentage points to a bid of 3.50 points. Investing rarely gets better than this: Buy paper you know carries a higher risk but also a higher return, and then have Uncle Sugar eliminate that risk so you also make a windfall profit.

44 Riverside Avenue
This is a very nice house but you can reach out the back window and pat the roofs of trucks wizzing past on I-95. It last sold for $890 in 2005 (after initially asking $1.249) so the new sellers aren't asking for the moon here ($1.075) but, unless the highway has shifted north since they bought it, the problem remains.

Going for broke?
The same builder who brought new price records to East Elm Street for condominiums has listed a single family home at 110 E. Elm at $8.5 million. I'm dubious but if I had his business acumen I wouldn't be working at my advanced old age, so I wish him well and good luck.